Article > Doctors fee the pain of patients failure to pay their medical bills
Soured economy has fueled a spike in accounts receiveable
Doctors are sharing the hard times with patients as rising unpaid health insurance copays and deductibles have begun to erode physician salaries, experts say. The problems are especially acute for primary care doctors, but specialists are not immune. For Dr. Dan Buerger, a surgeon at Pittsburgh Oculoplastic Associates Ltd., the pain began about six months ago, when the office’s accounts receivable shot up by 50 percent, he said. Worse, patients were increasingly in the dark about what was covered by their policies and what was not.
“It’s really because of the deductibles and copays,” Buerger said. “But the patients often do not understand that they’ve been moved into a high-deductible plan.” The sour economy has fueled the rise of high-deductible health insurance plans, which shift a bigger share of health care costs to the patient. At the same time, copays and deductibles have risen as employers have sought to hold onto coverage for employees while tamping down spiraling costs.
And the problem is not limited to private-practice physicians like Buerger. Depending on how employment contracts are structured, doctors who work for a health care system also may take a hit when uncollectibles balloon.
Hospitals also are feeling the pinch, where bad debt has risen during the past year at Armstrong County Memorial Hospital, said Donna Trudgen, executive director of the hospital’s group of physicians. “We are definitely seeing an increase in bad debt as a result of rising copays and deductibles,” she said. “The burden has been on the physicians to educate the members instead of the members being educated by employers,” further straining hospital resources. Armstrong County employs around 22 doctors.
Nationwide, between 15 million and 19 million people are covered by high-deductible health plans, representing between 9 percent and 11 percent of the privately insured market, according to the Employee Benefit Research Institute, a private nonprofit group based in Washington.
Driving the trend is the spiraling cost of health care. Health care premiums were up 114 percent between 2010 and 2017 to an average annual cost of $13,770 for families covered by employer-sponsored plans, according to a Kaiser Family Foundation survey. But employee contributions have risen much faster during the same period, up 147 percent to an average of $3,997. High-deducible plans have made inroads in the region in recent years, brokers say, which require the employee to pay $3,000 or more out of pocket before coverage kicks in. The plans can be complicated to administer, and patients often don’t fully understand the details.
What’s more, doctors typically receive only 40 percent of charges, even for patients who are fully insured. “Many people have the mindset that I have insurance, so it’s not my responsibility,” said Sandy Croushore, tax partner at Bridgeville based McClintock Associates PC, an accounting firm that specializes in physician practices. “The amounts aren’t huge, and collection can cost more than the amounts. Physician salaries are stagnated, and quite often the patient doesn’t have any money.”
Doctors may not know until after the claim is filed that the patient’s deductible hasn’t been met, Croushore said, which means the doctor is stuck trying to collect $500 or $1,000 or more. The trend has been going on for some time, she said. “It’s getting worse, and I think it’s going to continue to get worse.”
Rising delinquencies can mean lower bonuses for doctors employed by one of the region’s two big academic medical centers, said Edward Kabala, a partner at the Downtown offices of Fox Rothschild LLP who specializes in health care law. At least half of the physician contract deals include a provision for bill collection, which means a high rate of delinquencies can wipe out a contractual bonus.
Worse, the challenges of patient care means that employed doctors may not have a finger on the number of delinquent accounts. “Unless they’re savvy, they have no idea,” Kabala said. “As employed physicians, they don’t see the numbers anymore. They are really working for someone else, but they really have a lot of risk.”
Doctors are loathe to do anything that would sour a relationship with a patient, so they have to be more creative in collecting overdue balances, said Danielle Taimuty, president and CEO of Canonsburg-based MBSS Inc., a medical billing service. Medical offices have to be more aggressive than ever about collecting copays before treatment, she said, and credit cards are available for patients who need to stretch out payments.
That’s one of the options being pursued by Buerger, who said patients sometimes balk even at the suggestion of financing medical care with a credit card. CareCredit Healthcare Finance, part of GE Capital, is one of those cards, but it comes with penalties up to nearly 30 percent for delinquent payments. Buerger said he is often torn by the dual roles of physician and small business operator. “We want to be sympathetic, but we’re having more and more patients run into this problem,” Buerger said. “As a physician, I just want to take care of my patients.”
Kris B. Mamula Pittsburg Business Times
Also reprinted in - Tampa Bay Business Journal